80 FR 51852 - Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 2.11, BATS Trading as Outbound Router
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 165 (August 26, 2015)
Federal Register Volume 80, Issue 165 (August 26, 2015)
| Page Range | 51852-51855 | |
| FR Document | 2015-21083 |
[Federal Register Volume 80, Number 165 (Wednesday, August 26, 2015)] [Notices] [Pages 51852-51855] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-21083] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75746; File No. SR-EDGX-2015-37] Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 2.11, BATS Trading as Outbound Router August 20, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on August 11, 2015, EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b- 4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A). \4\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend Rule 2.11, BATS Trading as Outbound Router, in order to conform to the rules of BATS Exchange, Inc. (``BZX'') and BATS Y-Exchange, Inc. (``BYX'').\5\ --------------------------------------------------------------------------- \5\ See BZX and BYX Rules 2.11. See also Securities Exchange Act Release Nos. 69744 (June 12, 2015), 78 FR 36612 (June 18, 2015) (SR- BYX-2013-018); and 69744 (June 12, 2013), 78 FR 36621 (June 18, 2015) (SR-BATS-2013-032) (notices of filing and immediate effectiveness of proposed rule changes to amend BYX and BZX Rules 2.11, entitled ``BATS Trading, Inc. as Outbound Router''). --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. (A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In early 2014, the Exchange and its affiliate, EDGA Exchange, Inc. (``EDGA''), received approval to effect a merger (the ``Merger'') of the Exchange's parent company, Direct Edge Holdings LLC, with BATS Global Markets, Inc., the parent of BZX and BYX (together with EDGA, and EDGX, the ``BGM Affiliated Exchanges'').\6\ In the context of the Merger, the BGM Affiliated Exchanges are working to align certain system and regulatory functionality, retaining only intended differences between the BGM Affiliated Exchanges. Thus, the proposal set forth below is intended to amend Rule 2.11, BATS Trading as an Outbound Router, to make such Rule identical to the corresponding Rule 2.11 on BZX and BYX. The Exchange does not propose to alter its current system functionality with regard to its use of BATS Trading, Inc. (``BATS Trading'') as an outbound router and its use of an error account. Rather, the proposed rule change is designed to provide a consistent rule set across each of the BGM Affiliated Exchanges.\7\ --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 71449 (January 30, 2014), 79 FR 6961 (February 5, 2014) (SR-EDGX-2013-043; SR-EDGA- 2013-034). \7\ See BZX and BYX Rules 2.11. The Exchange notes that EDGA intends to file a similar proposal that will align the rules related to its use of BATS Trading as an outbound router across each of the BGM Affiliated Exchanges. --------------------------------------------------------------------------- Pursuant to Exchange Rule 2.11, the Exchange relies on BATS Trading to provide outbound routing services from itself to a routing destination. Rule 2.11 also provides the authority to the Exchange or BATS Trading to cancel orders on the Exchange's equity securities platform when a technical or system issue occurs. Rule 2.11 also describes the operation of an error account for BATS Trading. The Exchange proposes to make the amendments to Rule 2.11 described below to align each subparagraph with the corresponding subparagraph within BZX and BYX Rules 2.11.\8\ Again, none of these proposed changes alter the authority of the Exchange or BATS Trading to cancel orders that result from a technical or system issue nor do they amend the operation of an error account for BATS Trading. --------------------------------------------------------------------------- \8\ The Exchange notes that it does not propose to amend Rules 2.11(a)(1)--(3) and (b) as those subparagraphs are identical to BZX and BYX Rules 2.11(a)(1)-(3) and (b). --------------------------------------------------------------------------- First, the Exchange proposes to make the follow ministerial changes to Rule 2.11 to conform to BZX and BYX Rules 2.11, none of which amend the substance or meaning of each section of the rule:Add ``, Inc.'' after ``BATS Trading'' in the title of Rule 2.11 to align with the title of BZX and BYX Rules 2.11; and Replace the word ``accordance'' with the word ``compliance'' in subparagraph (a)(4) to align with BZX and BYX Rules 2.11(a)(4); None of the above changes alter the meaning of each subparagraph. They are simply intended to align each subparagraph with the corresponding subparagraph within Rule 2.11. Second, the Exchange proposes to amend Rule 2.11(a)(6) to align with BZX and BYX Rules 2.11(a)(6). Rule 2.11(a)(6) will continue to provide that the Exchange or BATS Trading may cancel orders as either deems to be necessary to maintain fair and orderly markets if a technical or systems issue occurs at the Exchange, BATS Trading or a routing destination. The Exchange proposes to replace: (i) The phrase ``if and when a systems, technical or operational issue'' with ``if a technical or systems issue''; and (ii) the term ``Trading Center'' with ``routing destination.'' Replacement of these terms do not alter the meaning of Rule 2.11(a)(6). Rather, they simply align the rule's text with that of BZX and BYX Rules 2.11(a)(6). To further align the rule text with BZX and BYX Rules 2.11(a)(6), the Exchange proposes to delete the phrase ``of orders'' from the last sentence of Exchange Rule 2.11(a)(6). Rule 2.11(a)(6) will continue to require that the Exchange or BATS Trading provide notice of the cancellation of orders to affected Members as soon as practicable. Third, the Exchange proposes to amend Rule 2.11(a)(7) to align with BZX [[Page 51853]] and BYX Rules 2.11(a)(7). Subparagraph (a)(7) currently states the following: BATS Trading shall maintain an error account for the purpose of liquidating an error position when such position, in the judgment of the Exchange or BATS Trading subject to the factors described herein, cannot be fairly and practicably assigned to one or more Members in its entirety. An error position can be acquired if it results from a systems, technical or operational issue experienced by BATS Trading, by the Exchange or by a Trading Center to which BATS Trading directed an outbound order. The Exchange proposes to replace subparagraph (a)(7) in its entirety. As amended subparagraph (a)(7) would define ``Error Positions'' as ``positions that are the result of an execution or executions that are not clearly erroneous under Rule 11.15 and result from a technical or systems issue at BATS Trading, the Exchange, a routing destination, or a non-affiliate third-party Routing Broker that affects one or more orders.'' Subparagraph (a)(7) would also continue to state that BATS Trading will maintain an error account for the purpose of addressing Error Positions. The assignment and liquidation of Error Positions discussed under current subparagraph (a)(7) will be addressed under the proposed amendments to subparagraph (a)(7)(D) discussed below. Fourth, the Exchange proposes to amend subparagraph (a)(7)(A) to add the word ``this'' before ``Rule 2.11(a)(7)'' and capitalize reference to Error Positions to align with BZX and BYX Rules 2.11(a)(7)(A). Notwithstanding these changes, subparagraph (a)(7)(A) will continue to require that an Error Position not include any position that results from an order submitted by a Member to the Exchange that is executed on the Exchange and automatically processed for clearance and settlement on a locked-in basis. Fifth, the Exchange proposes to amend subparagraph (a)(7)(B) to pluralize references to the term ``position'' to align with BZX and BYX Rules 2.11(a)(7)(B). Subparagraph (a)(7)(B) shall continue to require that, except as provided in Rule 2.11(a)(7)(C) (described below), BATS Trading not (i) accept any positions in its error account from an account of a Member, or (ii) permit any Member to transfer any positions from the Member's account to BATS Trading's error account. Sixth, the Exchange proposes to amend subparagraph (a)(7)(C) to replace reference to: (i) a ``systems, technical or operational issue'' with ``technical or systems issue'' and; (ii) ``a Member's trade'' with ``a Member to a trade''. As amended, subparagraph (a)(7)(C) would state that if a technical or systems issue results in the Exchange not having valid clearing instructions for a Member to a trade, BATS Trading may assume that Member's side of the trade so that the trade can be automatically processed for clearance and settlement on a locked-in basis. These changes to align subparagraph (a)(7)(C) with BZX and BYX Rules 2.11(a)(7)(C) and do not alter its meaning or application. Lastly, the Exchange proposes to replace subparagraphs (a)(7)(D), (E), and (F) in their entirety with new subparagraphs (D) and (E), the text of which are identical to BZX and BYX Rules 2.11(a)(7)(D) and (E). Subparagraph (D) would state that, in connection with a particular technical or systems issue, BATS Trading or the Exchange shall either (1) assign all resulting Error Positions to Members in accordance with paragraph (i) below, or (2) have all resulting Error Positions liquidated in accordance with subparagraph (ii) below. This provision is similar to current subparagraph (a)(7)(D) and (E). Subparagraph (D) would further require that any determination to assign or liquidate Error Positions, as well as any resulting assignments, shall be made in a nondiscriminatory fashion. This provision is substantially similar to current subparagraphs (a)(7)(F)(ii). Proposed subparagraph (a)(7)(D)(i) would govern the assignment of Error Positions. Specifically, BATS Trading or the Exchange are required to assign all Error Positions resulting from a particular technical or systems issue to the Members affected by that technical or systems issue if BATS Trading or the Exchange: (i) Determines under proposed subparagraph (a)(7)(D)(i)(1) that it has accurate and sufficient information (including valid clearing information) to assign the positions to all of the Members affected by that technical or systems issue; (ii) determines under proposed subparagraph (a)(7)(D)(i)(2) that it has sufficient time pursuant to normal clearance and settlement deadlines to evaluate the information necessary to assign the positions to all of the Members affected by that technical or systems issue; and (iii) has not determined under proposed subparagraph (a)(7)(D)(i)(3) to cancel all orders affected by that technical or systems issue in accordance with subparagraph (a)(6) discussed above. These provisions are similar to current subparagraphs (a)(7)(D)(i) and (ii) as well as current subparagraphs (a)(7)(F) and (F)(i). Proposed subparagraph (a)(7)(D)(ii) would govern the liquidation of Error Positions. Under proposed subparagraph (a)(7)(D)(ii) BATS Trading must liquidate any Error Positions as soon as practicable where it or the Exchange is unable to assign all Error Positions resulting from a particular technical or systems issue to all of the affected Members in accordance with subparagraph (D) discussed above, or if BATS Trading or the Exchange determines to cancel all orders affected by the technical or systems issue in accordance with subparagraph (a)(6) above. This provision is substantially similar to current subparagraphs (a)(7)(E). In liquidating such Error Positions, proposed subparagraph (a)(7)(D)(ii)(1) and (2) require BATS Trading to: (i) Provide complete time and price discretion for the trading to liquidate the Error Positions to a third-party broker-dealer and shall not attempt to exercise any influence or control over the timing or methods of such trading; and (ii) establish and enforce policies and procedures that are reasonably designed to restrict the flow of confidential and proprietary information between the third-party broker-dealer and BATS Trading/the Exchange associated with the liquidation of the Error Positions. These provisions are similar to current subparagraphs (a)(7)(E)(i) and (ii). Proposed subparagraph (a)(7)(E) would require BATS Trading and the Exchange to make and keep records to document all determinations to treat positions as Error Positions and all determinations for the assignment of Error Positions to Members or the liquidation of Error Positions, as well as records associated with the liquidation of Error Positions through the third-party broker-dealer. This provision is substantially similar to current subparagraphs (a)(7)(F)(ii). 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\9\ Specifically, the proposed change is consistent with Section 6(b)(5) of the Act,\10\ because it is designed to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange does not propose to alter its current system [[Page 51854]] functionality with regard the treatment of Error Positions set forth under current Exchange Rules. Rather, the proposed rule change is designed to provide a consistent rule set across each of the BGM Affiliated Exchanges. As mentioned above, the proposed rule changes, combined with the planned filing for EDGA,\11\ would allow the BGM Affiliated Exchanges to provide a consistent set of rules as it relates to the treatment of Error Positions across each of the BGM Affiliated Exchanges. Consistent rules, in turn, will simplify the regulatory requirements for Members of the Exchange that are also participants on EDGA, BZX and/or BYX. The proposed rule change would provide greater harmonization between rules of similar purpose on the BGM Affiliated Exchanges, resulting in greater uniformity and less burdensome and more efficient regulatory compliance and understanding of Exchange Rules. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national market system. Similarly, the Exchange also believes that, by harmonizing the rules and across each BGM Affiliated Exchange with respect to the treatment of Error Positions, the proposal will provide consistent rules and methodology for handling Error Positions across the BGM Affiliated Exchanges, meaning that the proposed rule change is equitable and will promote fairness in the market place. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b). \10\ 15 U.S.C. 78f(b)(5). \11\ See supra note 7. --------------------------------------------------------------------------- (B) Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the act. To the contrary, allowing the Exchange to implement substantively identical rules across each of the BGM Affiliated Exchanges regarding the treatment of Error Positions does not present any competitive issues, but rather is designed to provide greater harmonization among Exchange, EDGA, BYX, and BZX rules of similar purpose. (C) Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A) of the Act \12\ and paragraph (f)(6) of Rule 19b-4 thereunder.\13\ The proposed rule change effects a change that (A) does not significantly affect the protection of investors or the public interest; (B) does not impose any significant burden on competition; and (C) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission.\14\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 17 CFR 240.19b-4. \14\ The Exchange has fulfilled this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),\16\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange believes that waiver of the 30-day operative delay would benefit investors because it will allow the Exchange to have consistent rules across each of the BGM Affiliated Exchanges regarding the treatment of Error Positions. The Exchange also notes that the proposed rule change does not alter its current system functionality with regard to the treatment of Error Positions set forth under current Exchange Rules. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest as it will harmonize the treatment of Error Positions across the BGM Affiliated Exchanges. Therefore, the Commission hereby waives the 30- day operative delay and designates the proposed rule change to be operative upon filing with the Commission.\17\ --------------------------------------------------------------------------- \15\ 17 CFR 240.19b-4(f)(6). \16\ 17 CFR 240.19b-4(f)(6)(iii). \17\ For purposes only of waiving the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission may summarily temporarily suspend such rule change if it appears to the Commission that such action is: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File No. SR-EDGX-2015-37 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-EDGX-2015-37. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All comments [[Page 51855]] received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-EDGX-2015-37 and should be submitted on or before September 16, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\18\ --------------------------------------------------------------------------- \18\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-21083 Filed 8-25-15; 8:45 am] BILLING CODE 8011-01-P
![51852 Federal Register / Vol. 80, No. 165 / Wednesday, August 26, 2015 / Notices
All submissions should refer to File at www.batstrading.com, at the securities platform when a technical or
Number SR–NASDAQ–2015–096 and principal office of the Exchange, and at system issue occurs. Rule 2.11 also
should be submitted on or before the Commission’s Public Reference describes the operation of an error
September 16, 2015. Room. account for BATS Trading. The
For the Commission, by the Division of Exchange proposes to make the
II. Self-Regulatory Organization’s
Trading and Markets, pursuant to delegated Statement of the Purpose of, and amendments to Rule 2.11 described
authority.15
Statutory Basis for, the Proposed Rule below to align each subparagraph with
Robert W. Errett, Change the corresponding subparagraph within
Deputy Secretary. BZX and BYX Rules 2.11.8 Again, none
In its filing with the Commission, the of these proposed changes alter the
[FR Doc. 2015–21080 Filed 8–25–15; 8:45 am]
Exchange included statements authority of the Exchange or BATS
BILLING CODE 8011–01–P
concerning the purpose of and basis for Trading to cancel orders that result from
the proposed rule change and discussed a technical or system issue nor do they
any comments it received on the amend the operation of an error account
SECURITIES AND EXCHANGE
proposed rule change. The text of these for BATS Trading.
COMMISSION
statements may be examined at the First, the Exchange proposes to make
[Release No. 34–75746; File No. SR–EDGX– places specified in Item IV below. The the follow ministerial changes to Rule
2015–37] Exchange has prepared summaries, set 2.11 to conform to BZX and BYX Rules
forth in Sections A, B, and C below, of 2.11, none of which amend the
Self-Regulatory Organizations; EDGX the most significant parts of such
Exchange, Inc.; Notice of Filing and substance or meaning of each section of
statements. the rule:
Immediate Effectiveness of a Proposed
Rule Change to Rule 2.11, BATS (A) Self-Regulatory Organization’s • Add ‘‘, Inc.’’ after ‘‘BATS Trading’’
Trading as Outbound Router Statement of the Purpose of, and in the title of Rule 2.11 to align with the
Statutory Basis for, the Proposed Rule title of BZX and BYX Rules 2.11; and
August 20, 2015. Change • Replace the word ‘‘accordance’’
Pursuant to Section 19(b)(1) of the with the word ‘‘compliance’’ in
Securities Exchange Act of 1934 (the 1. Purpose subparagraph (a)(4) to align with BZX
‘‘Act’’),1 and Rule 19b–4 thereunder,2 In early 2014, the Exchange and its and BYX Rules 2.11(a)(4);
notice is hereby given that on August affiliate, EDGA Exchange, Inc. None of the above changes alter the
11, 2015, EDGX Exchange, Inc. (the (‘‘EDGA’’), received approval to effect a meaning of each subparagraph. They are
‘‘Exchange’’ or ‘‘EDGX’’) filed with the merger (the ‘‘Merger’’) of the Exchange’s simply intended to align each
Securities and Exchange Commission parent company, Direct Edge Holdings subparagraph with the corresponding
(‘‘Commission’’) the proposed rule LLC, with BATS Global Markets, Inc., subparagraph within Rule 2.11.
change as described in Items I and II the parent of BZX and BYX (together Second, the Exchange proposes to
below, which Items have been prepared with EDGA, and EDGX, the ‘‘BGM amend Rule 2.11(a)(6) to align with BZX
by the Exchange. The Exchange has Affiliated Exchanges’’).6 In the context and BYX Rules 2.11(a)(6). Rule
designated this proposal as a ‘‘non- of the Merger, the BGM Affiliated 2.11(a)(6) will continue to provide that
controversial’’ proposed rule change Exchanges are working to align certain the Exchange or BATS Trading may
pursuant to Section 19(b)(3)(A) of the system and regulatory functionality, cancel orders as either deems to be
Act 3 and Rule 19b–4(f)(6)(iii) retaining only intended differences necessary to maintain fair and orderly
thereunder,4 which renders it effective between the BGM Affiliated Exchanges. markets if a technical or systems issue
upon filing with the Commission. The Thus, the proposal set forth below is occurs at the Exchange, BATS Trading
Commission is publishing this notice to intended to amend Rule 2.11, BATS or a routing destination. The Exchange
solicit comments on the proposed rule Trading as an Outbound Router, to make proposes to replace: (i) The phrase ‘‘if
change from interested persons. such Rule identical to the corresponding and when a systems, technical or
I. Self-Regulatory Organization’s Rule 2.11 on BZX and BYX. The operational issue’’ with ‘‘if a technical
Statement of the Terms of Substance of Exchange does not propose to alter its or systems issue’’; and (ii) the term
the Proposed Rule Change current system functionality with regard ‘‘Trading Center’’ with ‘‘routing
to its use of BATS Trading, Inc. (‘‘BATS destination.’’ Replacement of these
The Exchange filed a proposal to Trading’’) as an outbound router and its terms do not alter the meaning of Rule
amend Rule 2.11, BATS Trading as use of an error account. Rather, the 2.11(a)(6). Rather, they simply align the
Outbound Router, in order to conform to proposed rule change is designed to rule’s text with that of BZX and BYX
the rules of BATS Exchange, Inc. provide a consistent rule set across each Rules 2.11(a)(6). To further align the
(‘‘BZX’’) and BATS Y-Exchange, Inc. of the BGM Affiliated Exchanges.7 rule text with BZX and BYX Rules
(‘‘BYX’’).5 Pursuant to Exchange Rule 2.11, the
The text of the proposed rule change 2.11(a)(6), the Exchange proposes to
Exchange relies on BATS Trading to delete the phrase ‘‘of orders’’ from the
is available at the Exchange’s Web site provide outbound routing services from last sentence of Exchange Rule
itself to a routing destination. Rule 2.11 2.11(a)(6). Rule 2.11(a)(6) will continue
15 17 CFR 200.30–3(a)(12).
1 15
also provides the authority to the to require that the Exchange or BATS
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
Exchange or BATS Trading to cancel Trading provide notice of the
3 15 U.S.C. 78s(b)(3)(A). orders on the Exchange’s equity cancellation of orders to affected
rmajette on DSK7SPTVN1PROD with NOTICES
4 17 CFR 240.19b–4(f)(6)(iii).
6 See Securities Exchange Act Release No. 71449
Members as soon as practicable.
5 See BZX and BYX Rules 2.11. See also
(January 30, 2014), 79 FR 6961 (February 5, 2014)
Third, the Exchange proposes to
Securities Exchange Act Release Nos. 69744 (June
12, 2015), 78 FR 36612 (June 18, 2015) (SR–BYX– (SR–EDGX–2013–043; SR–EDGA–2013–034). amend Rule 2.11(a)(7) to align with BZX
2013–018); and 69744 (June 12, 2013), 78 FR 36621 7 See BZX and BYX Rules 2.11. The Exchange
(June 18, 2015) (SR–BATS–2013–032) (notices of notes that EDGA intends to file a similar proposal 8 The Exchange notes that it does not propose to
filing and immediate effectiveness of proposed rule that will align the rules related to its use of BATS amend Rules 2.11(a)(1)—(3) and (b) as those
changes to amend BYX and BZX Rules 2.11, Trading as an outbound router across each of the subparagraphs are identical to BZX and BYX Rules
entitled ‘‘BATS Trading, Inc. as Outbound Router’’). BGM Affiliated Exchanges. 2.11(a)(1)–(3) and (b).
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![Federal Register / Vol. 80, No. 165 / Wednesday, August 26, 2015 / Notices 51855
received will be posted without change; The text of the proposed rule change Pursuant to Exchange Rule 2.11, the
the Commission does not edit personal is available at the Exchange’s Web site Exchange relies on BATS Trading to
identifying information from at www.batstrading.com, at the provide outbound routing services from
submissions. You should submit only principal office of the Exchange, and at itself to a routing destination. Rule 2.11
information that you wish to make the Commission’s Public Reference also provides the authority to the
available publicly. All submissions Room. Exchange or BATS Trading to cancel
should refer to File No. SR–EDGX– orders on the Exchange’s equity
II. Self-Regulatory Organization’s
2015–37 and should be submitted on or securities platform when a technical or
Statement of the Purpose of, and
before September 16, 2015. system issue occurs. Rule 2.11 also
Statutory Basis for, the Proposed Rule
For the Commission, by the Division of describes the operation of an error
Change
Trading and Markets, pursuant to delegated account for BATS Trading. The
authority.18 In its filing with the Commission, the Exchange proposes to make the
Robert W. Errett, Exchange included statements amendments to Rule 2.11 described
Deputy Secretary.
concerning the purpose of and basis for below to align each subparagraph with
the proposed rule change and discussed the corresponding subparagraph within
[FR Doc. 2015–21083 Filed 8–25–15; 8:45 am]
any comments it received on the BZX and BYX Rules 2.11.8 Again, none
BILLING CODE 8011–01–P
proposed rule change. The text of these of these proposed changes alter the
statements may be examined at the authority of the Exchange or BATS
SECURITIES AND EXCHANGE places specified in Item IV below. The Trading to cancel orders that result from
COMMISSION Exchange has prepared summaries, set a technical or system issue nor do they
forth in Sections A, B, and C below, of amend the operation of an error account
[Release No. 34–75745; File No. SR–EDGA– the most significant parts of such for BATS Trading.
2015–32] statements. First, the Exchange proposes to make
the follow ministerial changes to Rule
Self-Regulatory Organizations; EDGA (A) Self-Regulatory Organization’s
2.11 to conform to BZX and BYX Rules
Exchange, Inc.; Notice of Filing and Statement of the Purpose of, and
2.11, none of which amend the
Immediate Effectiveness of a Proposed Statutory Basis for, the Proposed Rule
substance or meaning of each section of
Rule Change to Rule 2.11, BATS Change
the rule:
Trading as Outbound Router 1. Purpose • Add ‘‘, Inc.’’ after ‘‘BATS Trading’’
August 20, 2015. In early 2014, the Exchange and its in the title of Rule 2.11 to align with the
Pursuant to Section 19(b)(1) of the affiliate, EDGX Exchange, Inc. title of BZX and BYX Rules 2.11; and
• Replace the word ‘‘accordance’’
Securities Exchange Act of 1934 (the (‘‘EDGX’’), received approval to effect a
with the word ‘‘compliance’’ in
‘‘Act’’),1 and Rule 19b–4 thereunder,2 merger (the ‘‘Merger’’) of the Exchange’s
subparagraph (a)(4) to align with BZX
notice is hereby given that on August parent company, Direct Edge Holdings
and BYX Rules 2.11(a)(4);
11, 2015, EDGA Exchange, Inc. (the LLC, with BATS Global Markets, Inc.,
‘‘Exchange’’ or ‘‘EDGA’’) filed with the the parent of BZX and BYX (together None of the above changes alter the
Securities and Exchange Commission with EDGA, and EDGX, the ‘‘BGM meaning of each subparagraph. They are
(‘‘Commission’’) the proposed rule Affiliated Exchanges’’).6 In the context simply intended to align each
change as described in Items I and II of the Merger, the BGM Affiliated subparagraph with the corresponding
below, which Items have been prepared Exchanges are working to align certain subparagraph within Rule 2.11.
Second, the Exchange proposes to
by the Exchange. The Exchange has system and regulatory functionality,
amend Rule 2.11(a)(6) to align with BZX
designated this proposal as a ‘‘non- retaining only intended differences
and BYX Rules 2.11(a)(6). Rule
controversial’’ proposed rule change between the BGM Affiliated Exchanges.
2.11(a)(6) will continue to provide that
pursuant to Section 19(b)(3)(A) of the Thus, the proposal set forth below is
the Exchange or BATS Trading may
Act 3 and Rule 19b–4(f)(6)(iii) intended to amend Rule 2.11, BATS
cancel orders as either deems to be
thereunder,4 which renders it effective Trading as an Outbound Router, to make
necessary to maintain fair and orderly
upon filing with the Commission. The such Rule identical to the corresponding
markets if a technical or systems issue
Commission is publishing this notice to Rule 2.11 on BZX and BYX. The
occurs at the Exchange, BATS Trading
solicit comments on the proposed rule Exchange does not propose to alter its
or a routing destination. The Exchange
change from interested persons. current system functionality with regard
proposes to replace: (i) The phrase ‘‘if
to its use of BATS Trading, Inc. (‘‘BATS
I. Self-Regulatory Organization’s and when a systems, technical or
Trading’’) as an outbound router and its
Statement of the Terms of Substance of operational issue’’ with ‘‘if a technical
use of an error account. Rather, the
the Proposed Rule Change or systems issue’’; and (ii) the term
proposed rule change is designed to
The Exchange filed a proposal to ‘‘Trading Center’’ with ‘‘routing
provide a consistent rule set across each
amend Rule 2.11, BATS Trading as destination.’’ Replacement of these
of the BGM Affiliated Exchanges.7
Outbound Router, in order to conform to terms do not alter the meaning of Rule
the rules of BATS Exchange, Inc. 2.11(a)(6). Rather, they simply align the
2013–018); and 69744 (June 12, 2013), 78 FR 36621
(‘‘BZX’’) and BATS Y-Exchange, Inc. (June 18, 2015) (SR–BATS–2013–032) (notices of rule’s text with that of BZX and BYX
(‘‘BYX’’).5 filing and immediate effectiveness of proposed rule Rules 2.11(a)(6). To further align the
changes to amend BYX and BZX Rules 2.11, rule text with BZX and BYX Rules
rmajette on DSK7SPTVN1PROD with NOTICES
18 17
entitled ‘‘BATS Trading, Inc. as Outbound Router’’). 2.11(a)(6), the Exchange proposes to
CFR 200.30–3(a)(12). 6 See Securities Exchange Act Release No. 71449
1 15 U.S.C. 78s(b)(1). (January 30, 2014), 79 FR 6961 (February 5, 2014)
delete the phrase ‘‘of orders’’ from the
2 17 CFR 240.19b–4.
(SR–EDGX–2013–043; SR–EDGA–2013–034). last sentence of Exchange Rule
3 15 U.S.C. 78s(b)(3)(A). 7 See BZX and BYX Rules 2.11. The Exchange
4 17 CFR 240.19b–4(f)(6)(iii).
notes that EDGX intends to file a similar proposal 8 The Exchange notes that it does not propose to
5 See BZX and BYX Rules 2.11. See also that will align the rules related to its use of BATS amend Rules 2.11(a)(1)–(3) and (b) as those
Securities Exchange Act Release Nos. 69744 (June Trading as an outbound router across each of the subparagraph are identical to BZX and BYX Rules
12, 2015), 78 FR 36612 (June 18, 2015) (SR–BYX– BGM Affiliated Exchanges. 2.11(a)(1)–(3) and (b).
VerDate Sep<11>2014 14:29 Aug 25, 2015 Jkt 235001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 E:\FR\FM\26AUN1.SGM 26AUN1](https://thefederalregister.org/doc/80_FR_52017/page/4.svg)
Document Created: 2015-12-15 10:59:03
Document Modified: 2015-12-15 10:59:03
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 51852 |
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